Bottom line on whether health information exchanges can succeed

By Rutrell Yasin

Sep 21, 2011

A sustainable model is paramount for a state-run health information exchange (HIE) to flourish, according to the latest issue brief by the National Association of State Chief Information Officers (NASCIO).

Current health reform policies call for states to build health insurance exchanges to make it easier for consumers to shop for individual health plans.

State CIOs and policy officials play varying roles in developing health information exchanges. Since 2010, the number of public health information exchanges has nearly doubled, but looming questions around HIE sustainability still exist, according to NASCIO, a leading advocate for technology policy at all levels of government.

“Continued ingenuity will be imperative in ensuring a state-run HIE is independently sustainable when public grants may no longer be available,” the report states.

“Because of the harsh reality of state budgets, the very costly process of startup and implementation of a state-run HIE will most likely need government funding for the initial investment,” the report states.

States will need to consider costs related to submitting strategic and operational plans to the Office of the National Coordinator (ONC) under the State HIE Cooperative Agreement program. They may also need consultants who can provide legal guidance on meeting the requirements of the Health Insurance Portability and Accountability Act (HIPAA) and design a framework based on the business, information and technological architecture.

Additionally, state CIOs may need someone who can demonstrate that the HIE will generate enough revenue to cover all the costs for a functioning HIE. They must budget for data services, maintenance and upgrades. States may choose to procure these services through a third-party vendor, but the hosting services will still need to be added into the overall costs for maintaining an HIE, the NASCIO report notes.

“Many state CIOs have already started to explore cloud options in search of cost savings, scalability and many other benefits,” the report states.

Included in the brief are best practices for creating potential revenue streams, considerations for systems development, and innovative options that may reduce maintenance and lower costs. The report can be downloaded from the NASCIO website.